The New York Times further fans the flames of the emerging uneasiness between Microsoft and its hardware partners. As the paper reports, Microsoft decided it needed to get into the hardware game (with Surface) after the utter failure of HP's Slate 500 Windows 7 tablet. "Microsoft worked with other hardware partners to devise products that would be competitive with the iPad, but it ran into disagreements over designs and prices. 'Faith had been lost' at Microsoft in its hardware partners, including by Steven Sinofsky, the powerful president of Microsoft's Windows division, according to [a] former Microsoft executive." The biggest news is not Surface itself. It's the changing industry it represents. Microsoft failed to deliver capable smartphone/tablet software, which pissed off OEMs, who, in turn, turned to Android (and webOS for HP) - which in turn pissed off Microsoft, leading to Surface. Had Microsoft gotten its act together sooner, we'd have had far better OEM products.

I don't see this in practice. Microsoft was never explicitly prohibited from bundling practice with OEMs. Thus the ridiculous Windows tax issue is present until this day.

Of course not. Antitrust law is intended to restore competition in a given market, not kill it outright. Google and others were permitted to incentivize OEMs to include additional software. So, it made sense that MS was allowed to compete w/o tying incentives to the license cost of the OS.